House Passes Bill Exempting Gyms From Sales Tax

View of a gym at the Spa Sport Resort in Itu, some 100 km from Sao Paulo, which will host Japan's national football team during the FIFA World Cup Brazil 2014, on February 19, 2014. Japan will play in Group C with Colombia, Greece and Ivory Coast. AFP PHOTO / NELSON ALMEIDA (Photo credit should read NELSON ALMEIDA/AFP/Getty Images)

Lawmakers contend the state’s tax laws have been applied in ways never intended.

Missouri law establishes a sales tax on admission and fees “paid to, or in any place of amusement, entertainment or recreation, games and athletic events.” Several court cases have focused on that law, and the Missouri Supreme Court ruled in 2001 that athletic, exercise and fitness clubs count as places of recreation and that fees paid to them are subject to sales tax. In 2008, the high court concluded sales tax must be paid for fees a fitness facility said it received for personal training services.

The House legislation calls for levying sales tax when people are charged to watch an activity but not when they pay to participate. For example, sales tax would not be charged for dance lessons but would apply for a ticket to watch dancers perform.

“Children or adults who want to be in gymnastics or any individual who wants to join a gym, we should not be discouraging those people from doing healthy activities,” said sponsoring Rep. Eric Burlison, R-Springfield.

House members passed the bill 123-26, and it now goes to the state Senate, which approved its own version last week

Lawmakers and business organizations have voiced displeasure with how tax laws have been applied. Sen. Will Kraus said Wednesday that a Senate committee should investigate.